US Equities, Crude Oil Gain Ahead of Election

US stocks rebounded from the worst week since March as investors bet on the energy, materials and industrial sectors ahead of Tuesday’s US presidential election. Crude oil rose the most in more than three weeks. The S&P 500 rose by 1.23% to 3,310.24 while Dow Jones was up 423.45 points (1.60%) to 26,925.05.

US Manufacturing Gauge Expands at Fastest Pace Since 2018

US manufacturing expanded in October at the fastest pace in more than two years, fueled by the strongest orders growth since early 2004 and a pickup in employment. A gauge of factory activity increased to 59.3 from 55.4 a month earlier, according to data from the Institute for Supply Management.

ECB Six-week Countdown to Stimulus Action Has Banks Guessing

The European Central Bank’s exceptionally clear pledge to come up with a new package of monetary stimulus at its next policy meeting has given markets plenty to think about. President Christine Lagarde was forthright in saying her institution will provide all the support needed for a euro-area economy that is again shutting down under the onslaught of the coronavirus.

German Factories Led Europe’s Recovery Before Lockdowns Hit

German manufacturing drove Europe’s uneven recovery in October, a pickup that will almost certainly be derailed now by tough new restrictions to contain Covid-19. Last month saw a fourth consecutive increase in euro-area factory output, underpinned by stronger demand from within the region and beyond. Germany was the stand-out performer, benefiting from strong demand for cars, business equipment and machinery.

China Plans to Import More Oil as Glut Pressures Prices

A sharp drop in oil prices may be about to get some relief from China. Against a backdrop of sagging demand and signs of growing supply, the world’s biggest oil buyer raised the quota for use of overseas oil by non-state entities next year by more than 20% versus 2020, according to an announcement from the Ministry of Commerce. The increase in the import quota is equivalent to about 823,000 barrels a day, which is slightly less than the amount that OPEC member Algeria pumps.

Asia’s Factories Recover in October With India Leading Gains

Asia’s factories pushed ahead in October as managers remained upbeat about recovery prospects and local virus outbreaks become less severe, manufacturing gauges show. India’s purchasing managers index rose to 58.9 last month, its highest since May 2010, from 56.8 in September, while South Korea advanced to 51.2 from 49.8, and Taiwan stayed particularly strong at 55.1 in October after the previous month’s 55.2, according to IHS Markit figures.

Japan’s Car Sales Hit Top Gear as Recovery Picks Up Speed

Japan’s car sales surged in October, rising at the fastest pace in more than eight years as the economy continues to bounce back in the fourth quarter from a record economic contraction. Vehicle sales, one of Japan’s earliest monthly economic indicators, rose 31.6% from a year earlier, according to the Japan Automobile Dealers Association.

Oil Climbs With Russia in Talks on Delaying OPEC+ Output Hike

Oil rose the most in more than three weeks as Russian producers met with Energy Minister Alexander Novak to discuss the possibility of delaying an easing of OPEC+ output cuts by three months. Brent crude for January settlement gained by US$1.03 to US$38.97 per barrel

Source: Affin Hwang Research - 3 Nov 2020